Unified Communications Benefits and Costs for Your Industry

By: on February 26, 2016

Are you building a case for replacing your business’s current phone system with a unified communications (UC) system? If so, you’ll need to start thinking beyond cost-savings.

One good way to justify buying a UC solution is to consider how it can transform your employees’ work styles, rather than just looking at line-item cuts in your annual budget.

To help you understand the productivity benefits of UC for your industry and work culture, we surveyed employees about their UC solutions.

Here’s what we’ll cover:

Price Ranges for UC Systems, by Industry
User License Price Ranges: Cloud vs. On-Premise
Mobile UC Capabilities Offer Significant Business Value for Many Employees
Benefits of UC Vary Widely by Industry
UC Offers More Value for Remote Workers
Next Steps for Finding a System

Price Ranges for UC Systems, by Industry

Our survey asked employees in IT roles who are familiar with their businesses’ communications budgets about the costs of their systems.

The table below breaks down their responses, showing the average price of a UC system according to the respondent’s industry.

(The averages include prices for both on-premise and cloud systems. We factored in annual subscription costs for cloud solutions, since they’re typically priced on a subscription basis.)

Total UC System Costs, by Industry

One thing is immediately obvious: There’s lots of variation in the price of UC systems. The lowest average price respondents report is $17,500, in the construction and advertising industries. In health care, however, the average skyrockets to roughly $1.5 million.

Of course, the companies in our sample are of various sizes, structures and lines of business. Despite this, we can see a clear trend: More complex industries face higher average prices for UC solutions.

For example: While the average price of a system in agriculture, insurance and construction is below $100,000, law firms, engineering firms and health care organizations all average around $1 million.

The bottom line: If you’re working in a highly technical industry, you can expect to pay more, on average, for your UC solution.

User License Price Ranges: Cloud vs. On-Premise

You can use the table above to start ballparking the price you’re willing to pay for a system. Of course, there are other factors that will also affect your total cost of ownership (TCO).

For instance, price ranges for user licenses vary widely based on whether you pick a cloud or an on-premise solution. This is why, on average, our respondents report higher user-license prices for cloud than for on-premise systems (the fees shown for cloud solutions are all monthly):


Price Ranges for UC User Licenses:
One-Time, On-Premise Fees vs. Monthly Cloud Fees

Only 6 percent of respondents with on-premise solutions pay less than $75 for a user license, while 52 percent of those with cloud systems pay under this amount.

On the other hand, just 18 percent of respondents with cloud solutions pay above $200 for a user license, but 57 percent of those with on-premise systems pay more than this.

Joseph Williams, analyst at UC Strategies (an industry resource for information on UC technologies), says organizations that have been locked into expensive, on-premise contracts can sometimes save money by switching to a cloud system.

A lot of on-premise contracts are for three to five years. It’s very possible that when an organization’s contract expires, they’ll save money if they move to the cloud, because there’s a lot of price competition. I believe that price per endpoint in the cloud is going to drop 30 percent over the next two years.

Joseph Williams, analyst at UC Strategies

The bottom line: If you’re planning to license a significant number of users and you need to keep upfront costs low, a cloud system is probably the best choice.

Mobile UC Offers Significant Business Value

As you consider the price of a UC system, you may be wondering what exactly you’re paying for, beyond basic phone service.

As we explain in more detail in our e-book on the top UC providers, these systems offer big advantages for small organizations and multinational enterprises alike.

In particular, UC simplifies how employees manage multiple types of messages, including:

  • Email
  • Voicemail
  • Instant messaging/chat
  • Text messaging/SMS

Additionally, UC systems extend desk phone capabilities to mobile devices. As Williams explains, such capabilities have the potential to change the way your employees work.

Functionally, if an organization has moved to UC, [it’s] getting access to a more robust system that allows [it] to support different work styles: telework, remote work etc. If Judy, who works in accounts payable, has to work from home for a week because she has a sick kid, how do you enable that? Enabling remote work over IP is a lot easier than using other technologies.

Joseph Williams, analyst at UC Strategies

Digging deeper into the benefits of UC for employees, we asked respondents about how they perceive the business value of their system in terms of its features, ease of use and quality of service.

We found a high level of satisfaction with the technology:


Employees’ Perceived Business Value of UC

Only a statistically insignificant 1 percent of our sample reports they don’t find any value in their UC system. Over one-third reports “significant” value, and nearly half reports “moderate” value.

The bottom line: These results are proof that productivity-based justifications for UC—as opposed to cost-based justifications—aren’t simply hot air. Most employees find at least moderate value in the technology, and many see its value as significant.

Benefits of UC Vary Widely by Industry

By now, we’ve seen some strong evidence of the business value of UC. However, you’re probably wondering how many of your own employees will benefit from a new UC system.

Williams says a change in perspective is in order before many organizations will fully understand the benefits of UC: The focus must shift to how UC can streamline existing workflows and enable new working styles.

Small companies tend to talk about telephone systems. It’s very complicated to see the value of UC if all you’re doing is talking about is a telephone replacement. Typically, the conversation has to move away from the headset or the deskphone to workflow. Almost no one really wants a telephone system—that’s just what they’re replacing.

Joseph Williams, analyst at UC Strategies

The industry you work in is a major factor affecting how communications are incorporated in your company workflows.

The chart below breaks down how respondents perceive the value of UC according to their industry. (We asked about more industries than the chart shows, as it only includes the industries with the highest numbers of respondents.)


Value of UC, by Industry

While 39 percent of the overall sample believe their systems offer significant value, this percentage nearly doubles for respondents working in call centers and marketing/PR agencies.

Professional services, construction firms, entertainment/media companies and educational institutions also see their solutions as offering relatively high value.

It’s important to remember, however, that not all businesses in a given industry are going to get the same benefits from a UC system.

“There are some industries—and health care is a good example—in which the industry sees a great benefit from the technology overall, and yet there are hospitals and clinics that are absolutely fixed-desk cultures. You can’t ignore the vertical, and you can’t ignore the work culture—they’re both critical,” Williams explains.

The bottom line: Your industry is a major factor when considering the benefits of a UC solution—but primarily because it’s closely tied to your business’s work culture. Industries characterized by fixed-desk cultures won’t get as much value from a UC system.

That being said, let’s look in detail at how mobile and fixed-desk work styles impact the benefits of a UC solution.

UC Offers More Value for Remote Workers

One group in particular can significantly benefit from a UC deployment: remote workers.

UC systems make remote work easier by offering employees a wealth of communications options and intuitive user interfaces—regardless of whether they’re using a smartphone, a tablet, a desktop, an IP phone or a headset to communicate.

For instance: Employees can choose to have calls to their desk phones forwarded to mobile devices when they’re not in the office. They can even set up video conferences from a smartphone while working from a coffee shop, or reconfigure their phone system settings on the fly.

The results of our surveys show a clear correlation between how often employees work remotely and how much value they see in UC solutions:


UC Benefits, by Frequency of Remote Work

Thirty percent of employees who don’t work remotely at all see UC as offering little to no value—but this number drops to just 6 percent for employees who work remotely at least one day per week.

Among employees who work remotely four to six days per week, the percentage reporting minimal to no value for UC solutions drops to zero.

(The high percentage of daily remote workers reporting no value in their UC solutions is a statistical anomaly, as only 6 percent of our sample works remotely every day of the week.)

When we ask respondents which UC features contribute most to their productivity at work, we find remote workers highlight mobile capabilities such as find me/follow me (which forwards unanswered calls from desk phones to mobile devices).


Top Features for Employees Working Remotely
at Least 2 Days/Week

Other mobility features highlighted by the frequent remote workers in our sample include:

    • Mobile access to phone system settings and applications (mentioned as a productivity hack by 46 percent of this group).
    • Single identity numbers (also mentioned by 46 percent).

Williams explains that determining the value of UC solutions by industry is difficult when you look “at the less mobile work styles, like insurance agents or paper products vendors.

Some of these businesses are so factory- and process-oriented that there’s no value in UC for them, but others have salespeople and inventory management people who are mobile.”

An informal audit of your organization’s work styles can help you to determine how UC can transform and improve your work culture.

The bottom line: More mobile work cultures can benefit more from UC than fixed-desk work cultures. Look for a system offering mobile capabilities such as find me/follow me, single identity numbers and remote phone system access to enable a mobile work culture in your organization.

Next Steps for Finding a System

Now that you have an idea of the different benefits UC offers for your business, you can take some of these next steps toward finding the right system for your needs:

  • Download our e-book that ranks the top UC providers for smaller organizations and offers tips from a Gartner UC analyst on choosing a system.
  • Use our ROI calculator to estimate the return on investment (ROI) for your UC deployment. Our calculator tool is based on the results of the same surveys discussed in this report.
  • Use our UC feature checklist to compare the levels of functionality offered by different providers.
  • Call our team of experienced advisors at (855) 998-8505 to discuss your needs and get a list of vendors that will work for your budget. There’s no charge to you for our advisory services.

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VoIP Software Small Business Buyer Report – 2015

Top Considerations for Selecting and Implementing a SIP Provider (Part 1)

Businesses Compare the Top Unified Communications Vendors

See the top 10 UC providers and get tips for choosing a system in our E-Book